T5 




BULLETIN OF THE 



No. 41 



Contribution from the Bureau of Plant Industry, Wm. A. Taylor, Chief, 

January 14, 1914. 




A FARM-MANAGEMENT SURVEY OF THREE REP- 
RESENTATIVE AREAS IN INDIANA, 
ILLINOIS, AND lOWA.^ 

By E. H. Thomson. Agriculturist, and H. M. Dixon. Scientific Assistant, Office 

of Fitrm Management. 

INTRODUCTION. • 

Farm management treats of the business of farming. A farm- 
management survey has for its purpose a study of the profits of the 
individual farmer to determine the factors that control his income. 
Agriculture to be progressive must be profitable. As farming is a 
business involving both capital and labor, the farmer should receive 
a fair income on his investment as well as wages for his labor. Many 
farmers receive no wages for their work, due largely to poor farm 
organization or from following types of agriculture unsuited to their 
particular region. 

Successful farming is an individual, economic problem. The farm 
is a combination of enterprises, and their individual organization will 
determine in a large measure its profitableness. 

The corn-belt States excel almost all other regions in wealth of 
farm products. On rich soil with ample rainfall a system of agri- 
culture is found that is unequaled as an example of the expansive 
type of farming. This type is developed on the basis of the farm 
work horse as the means of motive power. To attain its highest 
efficiency, this type calls for expansion in farming area. Such a type 
is in direct contrast to the agriculture of the countries of southern 
Europe or of Belgium, where man and not the horse furnishes the 
labor. The American type is based on the product per man, the 
European on the product per acre of land. 

In the summer of 1911 the Office of Farm Management of the 
Bureau of Plant Industry, United States Department of Agriculture, 
made a farm-management survey of certain districts in Indiana, Illi- 
nois, and Iowa. The results of this survey, which are outlined in this 

Acknowledgment is due to Meysrs. H. F. Williams, B. L. Currier, B. M. McGrew, 
O. S. Rayner, and C. Wensel, who assisted in collecting the data presented in this bul- 
letin. Thanks are also extended to the many farmers in the regions studied through 
whose courtesy this work was made possible. 

13131°— 14 1 J. . , . 



\ 



2 BULLETIN 41, U. S. DEPAETMENT OF AGRICULTUEE. 

bulletin, include data from about 700 farms. It is fuU}^ realized that 
further studies, embracing larger areas in each State, are necessary 
before definite statements can be made regarding certain points. 
However, the information gathered furnishes almost conclusive proof 
with respect to many phases of farm organization. 

The results pertaining to the size of the farm in its relation to 
operating costs and the profits received are particularly valuable. 
It would be highlj'^ desirable to make a survey of the same regions for 
several successive years. If such data were obtained, however, it is 
believed that the conclusions would be the same as those from the 
one year's study. A possible exception might be the conclusions rela- 
tive to the best paying type of farming. Extreme fluctuation in 
prices may make some crops unprofitable at certain times. Potatoes 
and peaches are two excellent illustrations of this. 

Checking the results of any one year with the average prices for a 
period of years permits fairly accurate conclusions. Investigations 
made in different years and in widely separated States all point to 
the same general principles that apparently control a successfid farm. 

METHOD OF WORK. 

The data presented were obtained by having trained investigators 
who were thoroughly familiar with the agriculture in each district 
personally visit the farmers. Every farmer in the area selected for 
study was interviewed and a record of the year's business obtained. 
In this way, by including all the farms in a certain area, average 
results were secured. 

Experience has proved that one can not select farms which repre- 
sent the average of a community. Good farm buildings and neatly 
kept fences are not always sure signs of profitable farming. 

Certain questions are difficult for the farmer to answer and in a 
few instances his answer may be considerably in error. This trouble 
is eliminated by the fact that some men will underestimate, while 
others will overestimate the facts. The average is approximately 
correct. Only those results are included where there is a sufficient 
number of instances to insure reasonable accuracy. 

The farmer knows more about his business than most people give 
him credit for. Even though he keeps no records he is capable of 
giving a very close estimate on all those things with which he is 
familiar. 

Farm data gathered by the survey method of study ^ are unques- 
tionably as accurate as need be for all practical purposes. 

1 Warren, G. F., Livcrmore, K. C, and others. An agricultural surve.y — townships of 
Ithaca, Dryden, Danby. and Lansing, Tompkins County, New York. New York Cornell 
Agricultural Experiment Station, Bulletin 205, pp. 375-569, figs. 147-201, 1911. 

Thomson, E. H. Agricultural survey of four townships in southern New Hampshire. 
U. S. Department of Agriculture, Bureau of Plant Industry, Circular 75, 19 pp., 3 tigs., 
1911. 

0. OF D. 
FEB 4 r?u 



<0^ 
^X.<^ FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 3 

LOCATION AND DESCRIPTION OF THE AREAS STUDIED. 

Three districts, one each in Indiana, Illinois, and Iowa, were se- 
lected for the farm-management study, the approximate location of 
each being shown in figure 1. In choosing these areas an effort was 
made to have as uniform farm conditions as possible in each region. 
The soil and type of farming have a decided bearing on the profit- 
ableness of agriculture in a region. These factors were carefully con- 
sidered. Owing to differences in land values and to the general sys- 
tem of farming it was not possible to secure three areas in separate 
States that would be similar in all respects. The aim was to have 
each district representative of the agricultural conditions prevail- 
ing over a large area. 



MINNESOTA 




Vui. 1. — Map of Iowa, IlUnoiis, nnd Indiana, showinq: the location of the areas studied. 

Corn, oats, wheat, and hay were the crops universally grown in the 
districts studied, corn being the predominating crop in all of the 
districts. Hogs and cattle, Avith a few sheep, constituted the produc- 
tive live stock. 

DESCRIPTION OF THE INDIANA AREA. 

In Indiana three adjoining townships — Forest, Johnson, and 
Prairie — were selected. This region is in Clinton and Tipton coun- 
ties, about 40 miles north of Indianapolis. The nearest city of con- 
siderable size is Frankfort. Practically all of the farm produce sold 



4 BULLETIN 41, U. S. DEPARTMENT OF AGEICULTURE. 

was shipped out of the counties, there being no local market of any 
consequence. 

This area is one of the oldest settled regions in the central part of 
the State. The land was originally covered with heavy hardwood 
timber, except for a few" strips locally known as prairie soil. The 
land is level to slightly rolling, being cut up in some places by 
sluggish streams. The soil is a dark, rich loam and under good 
management is very productive. After the land was cleared large 
areas were too wet to cultivate well, but extensive systems of tile 
drainage have overcome this difficulty. Many farms have miles of 
tile drains running through them. 

General farming is followed in almost all cases. In a few sections 
canning factories have developed, and this encourages some truck 
growing. This type is usually confined to small farms near towns cr 
cities. The average size of the 277 farms studied was 112.8 acres. 
Of this area 86 per cent was tillable, 9.2 per cent was in woods, and 
4.5 per cent in waste land. Roads, streams, swamps^ etc., are included 
in the waste area. 

The important crops are corn, oats, wheat, hay, and clover seed. 
Of the rented farms 38 per cent of the tillable area and 36 per cent of 
that on the farms managed by the owners were in corn. Oats occupied 
19 per cent, Avheat 11 per cent, first and second year clover and tim- 
othy mixed, each 8 per cent, and pasture, not permanent, 13 per cent. 

The prevailing rotation was corn two or three years, oats, wheat, 
clover and timothy mixed, and pasture. Few men follow a definite 
rotation on their entire farm, certain fields often being kept in corn 
for several years. Generally the corn and hay were fed, oats, wheat, 
an.d clover seed being the crops sold. 

On the farms studied practically no beef cattle were raised and 
only a few were purchased and fed. Hogs were the most important 
of the productive live stock. 

Farm buildings, as a rule, were well built and neatly kept. The 
fences were unusually good, the farmers seeming to take a pride in 
this method of farm improvement. 

Practically all the roads in this region were graveled, there being 
only a few of the original dirt roads, which are almost impassable in 
the early spring. The building of the graveled roads has been a 
heavy expense to these farming districts and has been one of the 
causes of high taxes. The region as a w^hole is more prosperous and 
enterprising than some other sections of the State. 

DESCRIPTION OF THE ILLINOIS AREA. 

In Illinois the district selected comprised an area of approxi- 
mately 110 square miles in the southern part of Cass and Menard 



FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 

Counties. Among others it included the townships of Virginia, 
Ashland, and Tallula. By railroad the area is about 200 miles from 
Chicago and 100 miles from St. Louis. All of the produce sold is 
shipped out of the district. 

The land, except along the streams, is prairie soil. It is a sticky 
black loam, common to large areas in the central part of the State. 
Figure 2 shows the general character of the country. It lies \ery 
level in places and is likely to be wet unless tile-drained. Xearl}' all 
farms have excellent systems of tile drainage, which have rendered 
the soil one of the most productive in America. The continuous 
cropping of corn for over 50 years, although having its effect, is 
almost unnoticeable. With any reasonable regard to the conservation 
of fertility, this soil would seem almost inexhaustible. Corn, oats, 




Fig. 2. — A typical harvest scene in central Illinois. 

and wheat are the important crops. Very little hay is grow^n, and this 
is largely clover. The second crop of clover is cut for seed. 

The average size of the 100 farms studied was 240 acres. Of this 
95 per cent is tillable, 3 per cent is in woods, and 2 per cent in waste 
land. 

The area in corn per farm was 97 acres, the proportion on the 
tenant farms being about 10 per cent greater than on the farms 
operated by owners. Oats occupied 34 acres and wheat the same. 
The area in ha}^ was small, being only 13 acres on the owners' farms 
and 7 acres on those rented. The area in permanent pasture was 
greater than that in wheat, except on the tenant farms, where it con- 
stituted one-half as much. 



6 BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE. 

The rotation followed by a few men was corn three years, oats, 
and wheat. Clover seed was sown in the wheat. This generally 
makes a good growth the same year, after the Avheat is cut. It was 
usually plowed under the same fall or the following spring on these 
farms and was not allowed to grow a crop of hay. Several farms had 
fields where corn had been grown almost continuously for a number 
of years. 

The plan generally followed was to plant as much corn as could 
be taken care of during the rush season. Other crops, such as wheat 
and oats, were used to fill in. Oats are generally recognized as being 
an unprofitable crop on such high-priced land. 

A large number of live stock was kept on some farms. The feeding 
of cattle, hogs, mules, and horses gave an important source of 
income. Still other farmers were strictly grain growers, keeping 
no stock except the necessary work animals. 

The farm buildings were ample and well kept.. The fields were 
unusually large, with hedge fences bordering them. 

Considering the high price of land in that district, not as much 
care as one might expect is exercised in utilizing it. there being con- 
siderable waste areas along the fences and other places. 

The roads are not graveled, except in a feAV instances. In wet 
weather they are very bad, ownng to the thick, tenacious, claylike 
soil. 

The farmers in the area studied are thrifty and are hard workers. 
They know how to utilize machinery effectively so as to handle large 
areas, one man and team being expected to take care of 00 acres of 
corn. 

DESCRIPTION OF THE IOWA AREA. 

In Iowa the toAvnships of Willow, Greenbrier, and Highland, in 
the counties of Guthrie and Greene, were selected. This area is 
about 50 miles northwest of Des Moines and on the Chicago and 
Omaha line of the Chicago, IMilwaukee, & St. Paul Railroad. 

The region has not been settled as lung as either the one in Illinois 
or that in Indiana. Being prairie land with timber growth only along 
the streams, it is a fertile and productive agricultural district. In 
some places it is very rolling, steep hills being not uncommon. The 
rough areas are confined to the southern part, particularly to Guthrie 
County. 

The soil is a dark, rich loam and is very poorly drained in the more 
leA^el areas. Tile-drainage projects have opened up thousands of 
acres in that vicinity within the last few years. 

Corn, oats, and hay are the main crops. Wheat is sown, but not 
extensively. 



FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 7 

The average size of the 227 farms studied Avas 186 acres. Of this 
area 01 per cent was tillable. Approximately one-half of the crop 
land was in corn, the other half being in oats and hay. Nearly 30 per 
cent of the tillable area was used for pasture. 

The rotation that was often followed was corn (two to three years), 
oats, clover and timothy hay. 

Beef cattle and hogs constitute the most important part of the 
farm business. Large numbers of western steers are purchased and 
fed, while in the hilly sections, distant from a railroad, a few cattle 
are raised. 

The selling of corn is generally confined to the farms on the level 
lowlands and near the stations. Many of the farms are far from 
market and, although the roads are fairly good, transportation is 
an important factor. 

DEFINITIONS OF TERMS USED IN THIS SURVEY REPORT. 

In order to present the data clearly, certain terms which will be 
used throughout the discussion are defined below. It is important 
that the reader thoroughly understand these, as they will materially 
assist in the interpretation of the results. 

Farm capital. — The farm capital is the average at the beginning 
and at the end of the j^ear of the value of all real estate, improve- 
ments, machinery, live stock, feed and supplies, and ca^sh necessary 
to carry on the farm business. It includes the value of the farm- 
house, but not the household furnishings. 

Receipfs. — The farm receipts include the amount received from the 
sale of all farm products and also the receipts from outside labor, 
rent of buildings, etc. If the value of buildings, stock, produce, or 
equipment is greater at the end of the year than at the beginning, 
the difference is considered a receipt. 

Expenses. — The farm expenses represent the amount of money 
paid out during the year to carry on the farm business. If the 
value of buildings, stock, produce, or equipment at the end of the 
year is less than at the beginning, this loss is considered an expense. 
Household or personal expenses are not included, except the value 
of board furnished to hired help. 

Fann income. — The farm income is the difference betAveen the re- 
ceipts and expenses. It represents the amount of money available 
for the farmer's living, provided he has no interest to pay on mort- 
gages or other debts. 

Labor income. — The labor income is the amount that the farm oper- 
ator has left for his labor after 5 per cent interest on the average capi- 
tal is deducted from the farm income. It represents what he earned • 
as a result of his year's labor after the earning power of his capital 



8 



BULLETIN 41, U. S. DEPARTMENT OF AGRICULTUEE. 



has been deducted. In addition to the labor income the operator 
received a house to live in, fuel (when cut from the farm), garden 
products, milk, butter, eggs, etc. The labor income corresponds to 
what a hired man receives when he is given so much cash wages, 
together with beard and room. 

Farm owner. — The term '' farm owner " is applied to the man who 
works or manages the farm he owns. 

Owiwr add'dionaJ. — The term '' owner additional " is used to desig- 
nate the man who owns a farm and rents additional land. 

Landlord. — The landlord is the owner of a farm which is rented 
to a tenant. 

Tenant. — The tenant is the person operating a farm rented from 
one landlord. 

Tenant additional. — The term '' tenant additional ■" applies to the 
person operating land rented from more than one landlord. 

Number and Idnds of farms studied. — In the total area studied in 
the three States TOO complete farm records were secured. These 
were divided into four classes, according to the method of manage- 
ment. The farms operated by oAvners numbered 273. Xone of these 
men rented additional land, but worked only the farms they owned. 
The farms operated by tenants numbered 247, each farm being owned 
by one landlord, whose income from that farm was determined. The 
third class comprised a group of farmers, 12G in all, who owned one 
farm and rented additional land. They took this means of having 
the use of more land than they actually OAvned. The fourth class, 
51 in number, is made up of a few tenants who rented land from two 
or more landlords. These were not included in the tabulations with 
the other tenant farmers who operated only one farm. 

Of the 700 farms studied, 57 per cent were operated by owners 
and 43 per cent by tenants. Table I gives the number and classifica- 
tion of the records taken in each of the States. 

Table I. — ISiumhrr and chtasipcdtion of funiis studied in Indiana, lUinoifi, and 

Iowa. 



Classification of farms. 


Indiana. 


Ulino*. 


Iowa. 


Farms operated by- 


123 

83 
56 
15 


73 
71 
36 
16 


77 




93 




37 




20 






Total 


277 


196 


227 







INFLUENCE OF CLIMATE ON RESULTS. 



In studying the profits of a region certain factors which may exert 
a marked influence must be noted. It has been conclusively demon- 



FAEM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 



9 



strated that the rainfall during the months of July and August de- 
termines to a large extent the yield of corn. 
Figure 3 shows 

^ Qj 5: rv 1 !ii V 

^ i*j fe - 
^ << ^ ^ 



the average monthly 
rainfall for 10 
years, as well as for 
the year 1910. 

In Illinois and 
Indiana the year 
may be said to be 
normal in almost all 
climatic respects. 
In Iowa a drought 
in early summer 
caused a shortage in 
the returns of pos- 
sibly 20 per cent be- 
low normal. The 
effects of this 
drought were most 
noticeable on the 
corn crop. The 
prices of live stock 
and grain are dis- 
cussed on page 31. 
These had a marked 
effect on the profits 



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-, MO/VTHtr Pf?£C/P/TAr/OA/, /s/o. 

'iG. 3. — Chart showing a comparison of the rainfaU in 1910 
with the 10-year average for each district surveyed. 











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derived from the two types of farming. 



FARM PROFITS. 

INCOMES RECEIVED BY FARM OWNERS. 



The average capital, receipts, expenditures, and labor incomes for 
the 273 farms operated by owners are given in Table II. 

Table II. — Average area, capital, receipts, expenses, and profits on 273 farms 
operated by owners in Indiana, Illinois, and lotra. 



Total number of farms 

Average area acres . 

Average capital 

Average receipts 

Average expenses i , 

Average farm income 

Average interest at 5 per cent 

Average owner's labor income 



Indiana. 



123 
105 



$17,535 

1,876 

689 

1,187 

877 

310 



Illinois. 



73 

253 



Iowa. 



77 
176 



$23, 193 
2,308 

858 
1,450 
1,159 

291 



Grand 
total or 
general 
average. 



273 
178 



$30, 606 
3,076 
1,138 
1,938 
1,530 
408 



1 The value of unpaid family labor, except the operator's, has been added in with the other farm ex- 
penses. It is equivalent to the amount that would have been paid to hired help had not the family done 
the work. The average amount per farm was $86 in Indiana, $127 in Illiaois, and $101 in Iowa, 

13131°— 14 3 



10 



BULLETIN 41, U, S. DEPARTMENT OF AGRICULTURE. 



The average capital per farm is $17,535 in Indiana and nearly three 
times that amonnt in Illinois. This ditferenee is due to much larger 
farms and higher value of land per acre in the latter State. 

The receipts per farm in all three regions approximate one-tenth 
of the capital invested. 

The farm income, which represents the income earned by the com- 
bined forces of labor and capital, is the auiount available to the farmer 
for his living and savings, provided he had no interest to pay on any 
mortgage or other debt. 

Deducting 5 per cent interest on the average capital leaves an 
average labor income of $408 for the 273 farm owners. This income, 
in addition to the food products furnished by the farm, represents 
the farmer's salary as manager of the business. It is evident that 
these men are receiving only a moderate sum for their year's work. 
If they sold their farms at inventory value and invested the money 
in good securities at 5 per cent the interest alone on a capital of 
$30,G00 would return them $1,530. In addition to this, they would 
have the amount they were able to earn at other work. 

The assertion that farmers are making large profits is erroneous. 
They are living on the earnings of their investment and not on the real 
profits of the farm. A farmer having an investment of $"20,000, with 
no mortgage, may receive a minus labor income, yet have nearly 
$1,000 as interest on Avhich to live. It is assumed in this discussion 
that capital should return 5 per cent before allowing the farmer any- 
thing for his labor. 

VARIATION IN THE LABOR INCOMES OF OWNERS. 

In Table III the farms are divided according to the labor income 
received. Each group gives the number of men who made labor 
incomes ranging from minus $500 and more to over $5,000. 

Table III. — Variation in. hihor incomes on 273 farms operated hij oioners in 
Indiana, Illinois, and Iowa. 



Labor income roceived. 



—.$500 and more . 
—$499 to -$200.. 

-$199 to $0 

$1 to $200 

.$201 to $400 

,$401 to $600 

$601 to $800 



Number 
of farms. 



Percent- 
age of 
total 
number. 



9.9 
8.4 
14.7 
19.4 
12.4 
8.4 
7.3 



Labor income received. 



.?.SOUo $1,000. .. 
$1,001 to$l,.500.. 
$1,501 to $2 ,000. 
$2,001 to $.3,000. 
$3,001 to $5,000.. 
$5,000 and over. 



Number 
of farms. 



Percent- 
age of 
total 
number. 



4.7 
6.9 
3.6 
1.8 
1.1 
1.4 



One farmer out of every 22 received a labor income of over $2,000 
a year. One farmer out of every three paid for the privilege of 
working his farm, that is, after deducting 5 per cent interest on his 
investment he failed to make a plus labor income. 



FARM-MANAGEMENT SURVEY OP REPRESENTATIVE AREAS. 



11 



INCOMES RECEIVED BY FARM TENANTS. 

There are few reo^ions in the TTnited States where tenant farming 
has been developed so extensively and where it plays such an impor- 
tant part in agricuhnral prodnction as in the corn belt. The per- 
centage of farms worked by tenants is second only to those operated 
by owners, and the areas farmed and the prodncts grown compare 
very favorably with those of the farm ow^ners. 

In the region covered by this survey, records were secured from 247 
tenant farmers. These men rented one farm, or land owned by one 
person. There Avere 51 other tenants who rented farms from two 
different parties. Their records show the same results, which have 
not been included in Table IV. 



Table IV. — Aiwrage capital, receipts, expenses, and profits of tenants on 
farms operated hy tenants in Indiana. Illinois, and Iowa. 



Indiana 

(83 
farms). 



Illinois 

(71 
farms). 



Iowa 

(93 

farms). 



Average 

(247 
farms). 



Average area acres. . 

Average capital 

Average receipts 

Average expenses 

Average farm income 

Average interest at 5 per cent 

Average tenant's labor income 



128 



202 



187 



172 



.$1, 758 

1,335 

492 

843 

8S 
755 



$2,867 

2,257 

975 

1,282 

143 

1,139 



$2, 667 
1,605 
755 
850 
134 
716 



|;2, 431 

1,732 

740 

992 

122 
870 



Most tenants hope to become fann owners as soon as they have 
sufficient capital. The income they receive while leasing a farm is a 
measure of the period they will have to work before making the. 
change. The average tenant in Indiana, with an investment of 
$1,758, received $755 for his year's work. In Illinois, with an invest- 
ment of $2,8G7, he received $1,139 as a labor income. In Iowa, Avith 
an average capital of $2,6(')7, his labor income was $716. OAving to 
drought in early summer, the income of the tenant in loAva was prob- 
ably 20 per cent less than it Avould haA^e been in a normal crop year. 

The 247 tenant farmers made an average labor income of $870 
from an investment of less than $2,500. When it is remembered that 
the farm OAvners with over 12 times this investment made less than 
half the labor income of the tenants, the evidence is unmistakable 
that the man with small capital should rent rather than buy a farm. 

For the amount iuA^ested, the tenant's income is very much greater 
than that of the farm oAvner. The sum available for the family liv- 
ing, however, is smaller in the case of the tenant, for the farm oAvner, 
with an average capital of $30,606 (see Table II), has $1,530 interest 
to use, as Avell as the $408 labor income. Thus, if the farm OAvner 
is free of debt, as one-half of them are, he has $1,938 available for 
a living, as compared Avith the tenant's $992. 



12 



BULLETIN 41, U. S. DEPARTMENT OF AGRICULTUEE. 



In addition to this sum available for a living, each has what the 
farm furnishes in the shape of produce. After the tenant pays his 
living and personal expenses -out of this amount his savings can not 
be large. If we allow the owners 3.5 per cent on their investment 
instead of 5 per cent they would then receive approximately the 
same labor income as the tenants ($870). This percentage is the 
same as that received by the landlords from the rented farms. Tak- 
ing into consideration the results from all the farms managed by 
owners and by tenants, they show that a return can be expected of 
3.5 per cent on the investment and a labor income of $870. 

Seasonal variation and fluctuating prices have a marked influence 
on the jjrofits from farming in the districts studied. The average 
price received for corn sold by the landlords of the 247 tenant farms 
was 41 cents, and a drop of 5 cents alone would have reduced the 
income G per cent. 

INCOMES RECEIVED BY LANDLORDS. 

The farm, in the case of the landlord, is a business investment. 
He furnishes the capital, largely in the form of land, and the tenant 
furnishes the necessary labor and other means for its operation. The 
average investment of the 247 landlords for the three States studied 
was $25,210. The average net income on the capital invested was 
3.5 per cent. All items of expense, including repairs, seeds, taxes, 
and insurance, were deducted before figuring the net returns. Table 
V gives the average capital, receipts, expenses, and returns for the 
landlords in each State. 



Table V. 



-Average capital, receipts, expenses, and profits of landlords for 2^7 
farms operated by tenants, as shown in Table IV. 



Indiana 

(83 
farms). 



Illinois 

(71 
farms). 



Iowa 

(93 

farms). 



(247 
farms). 



Average area acres. 

Average capital 

Average receipts 

Average expenses 

Average farm income 



128 



202 



187 



172 



« 18, 423 

1,002 

351 

651 



36, 479 

1,538 

213 

1,325 



$20, 728 

1,014 

354 

660 



$25,210 

1,185 

306 

879 



Average profit on investment i per cent . 



3.53 



3.64 



3.19 



3.5 



Obtained by dividing the farm income by the average capital. 



The average return on investment from the farms in Illinois was 
3.6 per cent, in Iowa 3.2 per cent, and in Indiana 3.5 per cent. The 
income is a moderate return on the large capital, considering the 
enormous rise in land values during the past 10 years. In computing 
this income no credit has been allowed for the rise in value of real 
estate, except in case of actual improvements. 



FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 



13 



There has been a marked tendency throughout the entire country 
to consider the farm more and more as a business proposition. The 
landlord who is receiving 3.5 per cent net from his farm, with the 
bare land figured at $150 or more an acre, has a good, safe invest- 
ment. It would seem from the results that if the year studied was 
a normal one, land in the corn belt is not overvalued. Changes in 
the price of the staple products, such "as corn or oats, or material 
changes in the cost of production of these crops would be reflected 
in the price of farm land. Unless the price of corn becomes much 
higher for the next period of years, a pronounced increase in the value 
of land in this region can not be expected. 

The advisabilit}^ of buying a farm as an investment Avith the 
intention of not living on it is often a perplexing question. 

VARIATION IN THE PROFITS OF LANDLORDS. 

Table VI gives the A-ariation in the landlords' returns in the three 
States studied. 

Table VI. — Vfiriatinn in profils of landlords on 2'/?' tenant farms in Indiana, 

Illinois, and lotva. 



I>andlord's profit on invest- 
ment (percent). 


Number 
of land- 
lords. 


Percent- 
age 
of total 
number. 


I-andlord's profit on invest- 
ment (percent). 


Number 
of land- 
lords. 


Percent- 
age 
of total 
number. 


Less than 1 


6 
20 
75 

78 


2.4 j 
8.1 1 

30.4 t 

31.6 


4.1 to 5 


42 
13 

7 
6 


17.0 


1.1 to2 


5.1 to 6 


5.3 


2.1 to 3. 


6.1 to 7 


2.8 


3.1 to 4 


7.1 to 8 


2.4 









Out of 247 men 6 received less than 1 per cent on their invest- 
ments. The same number received between 7 and 8 per cent ; none 
received over 8 per cent. It is clear that no phenomenal returns 
can be expected from capital put in farm land in those States at 
the present time. It is believed that the data in Table VI are a 
very good indication of the returns one may expect from a farm 
investment in those districts. The chances of making more than 5 
per cent are about 1 in 10. 



BANKERS' ESTIMATES OF FARM PROFITS. 

In the corn-belt States one is nearly always referred to the local 
banker for information concerning the farmers of the region. The 
banker is considered good authority on all questions relating to the 
farmer's business, his income, investment, etc. Inquiry relative to 
the incomes of the farmers was made of the cashiers of 90 banks in 



14 



BULLETIN 41, U. S, DEPA.RTMENT OF AGRICULTUEE. 



the regions studied. Fifty-three replies were received and the results 
are given in Table VII. 

Table VII. — B<nikcrs' csliDidtcs of fdnnvr'ft jiroflts ((niipdrrd irit]t farts hroufjht 

out hji llif siirrcj/. 



state. 


Landlord's profit on 
farm investment (per 
cent). 


Tenant's labor income. 


Bankers' 
estimate. 


Returns as 

shown by 

survey. 


Bankers' 
estimate. 


Incomes as 

shown by 

survey. 


Indiana : 

Illinois 

Iowa 

Average 


4.20 
4.91 
4.06 


3.53 
3.64 
3.19 


$625 
691 
656 


$755 

1,139 

716 


4.91 


3.50 


657 .S70 



These estimates, although not agreeing identically with the results 
as found by the survey, are exceedingly interesting. The bankers 
believed that the landlords were getting about 1.4 per cent more than 
they were and the tenants $213 less than they were. Thus, the 
bankers' estimates of the total income from the rented farms com- 
pares ver}^ closely with the results of our investigations. 

Inquiry was also made as to the interest that the farmers would 
receive if they sold their farms and placed their money in the bank. 
The average rate given is 3.T per cent. This nearly corresponds with 
the returns that the landlords are actually receiving from their 
capital invested. It also agrees with the income of the farm owners, 
if we allow them the same labor income that the tenants receive. 

The average value per acre of the land (including buildings) in 
the three States is approximately $145 in Indiana, $175 in Illinois, 
and $111 in Iowa. The profits which are shown in the preceding 
tables are figured on this basis. 



INCOMES OF FARM OWNERS WHO RENT ADDITIONAL LAND. 

The stages that almost every farmer goes through in becoming a 
farm owner are, first, as a hired man ; second, as a tenant ; third, as an 
owner. In addition, there is another step that many men take in 
acquiring farms of sufficient size to give them comfortable incomes. 
Many men are able to own a small farm but feel the need of having 
a larger area to work. By renting additional land, usually parts of 
an adjoining farm, they utilize their labor and work horses to better 
advantage and receive greater returns without any appreciable in- 
crease in investment. Table VIII gives the capital, receipts, expenses, 
and labor income for 129 farmers who are following this method. 



FAEM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 



15 



Table VIII. — Average eupital, receipts, expenses, and profits on 129 farms 
operated by oivners renting additional land. 



Item. 



Average capital 

Average receipts 

Average expenses 

Average farm income 

Average interest at 5 per cent . . . 
Average operator's labor income 



Indiana 

(56 
farms). 



$11,321 

1, 780 

742 

1,038 

566 

472 



Illinois 

(36 
farms). 



$32,382 
4, 279 
1,.599 
2,680 
1,619 
1,061 



Iowa .\verage 

(37 , (129 

farms). farms). 



«17,S29 

2,228 

887 

1,341 

891 

450 



$20, 510 
2,762 
1,076 
1,686 
1,025 
661 



With $10,000 less invested than is shown by the owners operating 
only their own land, the labor income of these owners additional is 
over $250 greater than that of the farm owners. The average size 
of the farm owned was 105 acres, and 78 acres additional were rented. 
Where it is possible, this method permits a farmer to have a home 
of his own and at the same time a good-sized farm business with 
a comparatively small investment. It is an intermediate step be- 
tween tenant and owner. 

DISTRIBUTION OF FARM RECEIPTS. 

The farm receipts are derived mainly from crops and live stock. 
The proportion received from each varies with the method of opera- 
tion as to whether run by owner or tenant, as well as with the type 
of farming followed. In Indiana -18 per cent of the total income 
received by the owners was from the sale of live stock, while the ten- 
ants received only 36 per cenf~from this source. In Illinois cattle 
and hogs Avere fed in much larger numbers, the income of the owners 
from live stock being CO per cent of the total receipts. On the ten- 
ant farms 50 per cent of the receipts was from the sale of crops and 
3G per cent from the sale of stock. 

In Table IX the distribution of the receipts for both owners and 
tenants is given. 

Table IX. — Distrihntion of farm- receipts to landlord and tenant on 2^7 farms 
operated by owners and tenants in Indiana, Illinois, and Iowa. 









Operated by tenants (247 farms). 


Source of income. 


ers (273 farms). 

• 


Both landlord and 
tenant. 


Landlord only. 


Tenant only. 




Receipts. 


Percent- 
age of 
total. 


Receipts. 


Percent- 
age of 
total. 


Receipts. 


Percent- 
age of 
total. 


Receipts. 


Percent- 
age of 
total. 


Crops 


$858 

1,715 

143 

331 

26 

3 


27.9 
55.8 
4.6 
10.8 
.8 
.1 


$1,333 

778 

111 

459 

20 

2 


49.3 

28.8 
4.1 

17.0 
.7 
.1 


$677 

128 

8 

158 


.57.1 
10.8 

13! 3 


$657 

649 

103 

301 

20 

2 


37 9 


Stock 


37.5 


Stock products 

Increased inventory. . 
Labor 


5.9 
17.4 
1 2 


Miscellaneous 






.1 


Cash rent 


214 


18.1 


















Average or total. 


3,076 


100. 


2,703 


100.0 


1,185 


100.0 


1,732 


100.0 



16 



BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE. 



More crops and less stock are sokl from the rented farms than 
from those of the owners. This is to be expected, owing to the share 
.system of rental, whereby the landlord receives half of the grain, 
most of which he sells. 

The item of increased inventory represents an increase in invest- 
ment, either through more stock, new buildings, or tile drainage. 
To offset this, the cost for all improvements is included in the farm 
expenses. AVlien the investment costs of this nature are charged to 
the farm there must be a corresponding increase in the capital at 
the end of the year. 

Corn, oats, and wheat constitute the crops sold. Even on the 
small farms practically no cash crops other than these are grown. 
The farmers making the best incomes received a higher percentage 
of their receipts from live stock. 

A further discussion of the influence of the type of farming on 
profits is given on page 29. 

DISTRIBUTION OF FARM EXPENSES. 

The distribution of expenses on both owner and tenant farms is 
given in Table X. 

Table X. — DistriJnifioii of farm expenses [in iicrcciitdc/cs of total crpenses) 
on farms opvntlcil hii oiriicrs and tenants i)i Jiididiiii, Illinois, (uitl loira. 



Item of expense. 


Oper- 
ated by 
owners 

(273 
farms). 


Operated by tenants 
(247 farms). 


Item of expense. 


Oper- 
ated by 
owners 
-<273 
farms). 


Operated by tenants 
(24? farms). 


Farm 
total. 


Tenant. 


Land- 
lord. 


Farm 
total. 


Tenant. 


Land- 
lord. 


Labor 


33.0 

2.1 

.3 

18.8 

5.6 

1.3 
1.7 
1.3 


31.0 
2.5 

.4 
10.5 

9.2 

1.6 
1.4 
1.5 


34.6 
1.1 

'""'9.' 9" 

10.0 

1.8 

."i' 


0.4 

4.1 

.9 

4.4 

.8 

.1 
4.0 
3.9 


New buildings... 
Building repairs . 

TUe drains 

Twine and 

thrashing 

Insurance 

Taxes 


10.9 
.6 

3:8 

4.4 

1.0 

10.4 


8.4 

.8 

6.7 

6.5 
1.3 

14.4 


'.2 

7.0 

.7 

1.8 

28.8 

4.0 


22.8 


Seeds 


1.6 


Fertilizer 

Feed and grain.. 
New machinery 

and harness 

Machinery and 


18.4 

.8 
2.0 
35.0 


harness "repairs . 


Rent 




New fences 

Fence repairs 


Miscellaneous 


4.8 


3.8 


.8 



Approximately one-third of the total expense is for labor. This 
amount includes the value of board furnished; also the value of the 
family labor, except that of the operator. Some of the farm owners 
purchased large quantities of corn for feeding, thereby making this 
expense 18.8 per cent of the total. The expense for tile drains was 
largely incurred in Iowa and Indiana, where the construction of ex- 
tensive systems meant considerable outlay. 

The expense for twine, based on over 10,000 acres of small grain, 
averaged 21 cents per acre, or seven-tenths of a cent per bushel. From 



FARM-MAKAGEMENT SURVEY OF REPRESENTATIVE AREAS. 17 

2i to 2| pounds of twine per acre are ordinarily used. Thrashing 
charges Avere approximately 2 cents a bushel for oats and 4 cents for 
wheat, plus the cost of coal used. 

The average value of the farm buildings on the owner farms was 
$2,401, and on the tenant farms, $1,G52. If we include the cost of new 
buildings and cash repairs, the annual charge is 5.2 per cent of the 
building investment on the owner farms and 4.4 per cent on those 
rented. These percentages are higher than they would be in a region 
that has been settled longer and where fewer new buildings were 
being erected. 

The average amount invested in farm machinery and tools on the 
owner farms is $391. Tlie annual expense for new machinery and 
cash repairs is 16.9 per cent of the inventory value. This amounts to 
60 cents per crop acre per j^ear. On the rented farms the average 
amount invested is $3C8, and the cash paid out for new machinery, 
harness, and repairs is 21.2 per cent of the inventory value. This 
makes a cost of 56 cents per crop acre. It is expected that the cost 
would be higher on the latter, as men just starting in farming as 
tenants would be likely to purchase more new machinery. 

RELATION OF PROFITS TO THE EFFICIENCY OF THE FARMER. 

Of the 273 farms operated by owners, one-third of them make a 
minus labor income. Analysis of their farm business should show 
the reasons why so many of these men failed to receive anything for 
their labor. Is it because of poor crops, inferior stock, improper or- 
ganization of the farm, or merely plain indifference on the part of the 
farmer? It may justly be said that all these factors are contributing 
causes. 

Leaving out of consideration the limitations set by the size of the 
farm and the capital invested, the characteristics of the inefficient 
farmer stand out prominently. Economically speaking, the greatest 
losses figured on the basis of a labor income are due to indifference or 
contentment on the part of the farmer. His farm area and capital 
are sufficient to earn a substantial income. He fails through neglect 
of work, low crop yields, inefficient stock, poor farm organization, 
and unused capital. His expenses are the same per acre as those of 
good farmers. His receipts are the weak point. His neighbors 
succeed, not by spending less, but by taking in more. 

The size of the farm must also be considered in figuring losses, but 
large losses are not probable in a small business. The little farmer 
may lose all he has, but the greatest amount he can lose is small. 
13331°— 14 3 



18 



BULLETIN 41, U. S. DEPARTMENT OF AGEICULTURE. 



The relation of profits to the efticiencv of the farmer is shown in 
Table XI. 

Table XI. — Relation of profits to the efflcieney of the farmer on 213 farms 
operated by owners in Indiana, Illinois, and Iowa. 





Num- 
ber of 
farms. 


Aver- 
age 
size 

(acres). 


Aver- 
age 
crop 
area 

(acres). 


Distribution per acre. 


Labor income. 


Re- 
ceipts. 


Ex- 
penses. 


Farm 
income. 


Inter- 
est. 


Labor 
income. 


— S500 and more 


26 
23 
40 
53 
34 
23 
20 
13 
19 
10 
12 


267 
160 
102 
120 
139 
161 
184 
217 
201 
249 
330 


199 

117 

77 

95 

96 

118 

140 

160 

169 

179 

240 


$10. 98 
12.02 
12.94 
14.84 
14.98 
17.80 
17.13 
16.77 
19.18 
25.79 
25.46 


.$5. 97 
5.92 
5.53 
5.70 
«^5.37 
5.79 
5.16 
4.51 
5.00 
9.60 
7.14 


$5.01 
6.10 
7.41 
9.14 
9.61 
12.01 
11.97 
12.26 
14.18 
16.19 
18.32 


$8.74 
8.16 
8.30 
8.31 
7.42 
8.78 
8.22 
8.14 
8.23 
9.31 
8.46 


—fS. 73 


-$499 to -S20:J 


— 2.06 


-$199 to $3 


— .89 


$1 to $200 


83 


$2:il to $400 


2.19 


S4!)l to $600 


3 23 


$601 toison 


3.75 


$soi to $1,000 


4.12 


$1,001 to $1.. 500 

$1,.501 to .$2,000 


5.95 
6 88 


Over $2,000 


9.86 






Total or average 


273 


178 


1.33 


17.28 


6.39 


10.89 


8.60 


2.29 







In Table XI the farms are classified according to labor income. 
The men making the poorest and those making the best profits have 
large farms. Those just " breaking even " have, on an average, small 
farms. 

Many of these men are also poor farmers, but they can not be ex- 
pected to do as well as those working a large area. We do not find 
the gross inefficiency among the tenants, for they must earn the 
rent which goes to the landlord, and if they receive nothing for 
their labor they can not live. They have no interest on which to 
live, as does the farm owner with a large investment. The country 
would be benefited if the few inefficient farm owners on the large 
farms Avere persuaded to rent their farms to enterprising tenants. 
They would still have as much or more than they are now getting, 
and the tenant would have a good living. 

FARM CAPITAL. 

It is difficult to realize the innnense wealth embodied in the farms 
of the North Central States. The broad expanse of rich land, rang- 
ing in value from $100 to $200 an acre, constitutes an enormous 
resource. Owing to the extreme variations in capital, the number 
of farms included in the survey are too feAv to permit a careful 
study of the influence of the size of investment on profits. Of the 
273 farm owners only had less than $5,000 capital, while 50 per 
cent of them had more than $20,000. 

Generally speaking, the farmer's capital is in about the same 
proportion as the size of his farm, especially in a region of com- 
paratively uniform land values. If the men with large capital 



FAKM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 



19 



are making better iiu-oiiies, it iiieans that the hirger farms are pay- 
ing better. 

RELATION OF THE OWNER'S CAPITAL TO HIS INCOME. 

In Table XII is shown the relation of capital to labor income 
on the 273 farms operated by owners. 

Table XII. — Relation of the farm oiiuicr's cwpiiaJ to hus income on 27S farms 
in Indiana, Illinois, and Iowa. 



Capital. 


Number 
of farms. 


Average 
labor Ill- 
come. 


Capital. 


Number 
of farms. 


.\verage 
labor in- 
come. 


$5,Ono and less 


9 
37 
44 
45 
55 
32 


$74 
45 
283 
265 
264 
48:5 


$40,001 to $60,000 


29 
10 
12 


$315 


$5,001 1.0 810,000 


$60,0111 to $.SII,(KI0 


1 114 


$10,001 to $1.5,000 


$SO,001 and over 


1 804 


$15,001 to $20,000 






$20,001 to $:5(),000 




408 


$30,001 to $40,000 













It Avill be noticed that of the entire number 9 men with less 
than $5,000 capital received $74 for their year's work. Only 2 farm- 
ers out of -to Avith less than $10,000 invested made over $io6. Out of 
the entire 273 only 12 men received over $2,000 labor income. Each 
of these had more than $20,000 invested. The chance of a farm owner 
making a labor income of $1,000 with less than $15,000 invested is 
less than 1 in 20. 

The data in other tables are conclusive in showing more efficient 
use of man, horse, and machine labor on the large farms. The results 
also .show no appreciable difference in the crop yields obtained on the 
different-sized farms. When the same sj^stem of farming is followed, 
larger returns must result on the larger farms. Men who have large 
capital invested and who operate the big farms have a right to expect 
greater returns for the risk and responsibility incurred. Of course, 
if the type of farming followed is an unprofitable one, then the large 
farms will necessarily show large losses. The area a farmer works 
limits the use of his labor. The amount of capital he has invested 
limits the income from that source. 



RELATION OF LABOR INCOME TO THE DISTRIBUTION OF OWNER'S CAPITAL. 

The farm owner has about six-sevenths of hi.s total capital invested 
in land and buildings. The balance is largely in live stock, there being 
only a small percentage in machinery, tools, and supplies. Farmers 
making good incomes have their capital invested in very much the 
same manner as those receiving poor incomes. Table XIII shows 
the distribution of capital for the 273 farm owners, arranged accord- 
ing to the incomes they receive. 



20 



BULLETIN 41, U. S. DEPARTMENT OF AGEICULTURE, 



Table XIII. — Relation of the labor income to the ilistrihutioii of eapital on 27< 
farms operated by their owners in Indiana, Illinois, and Iowa. 





Average 
capital. 


Percentage in- 


Labor incomo. 


Real 

estate. 


Machin- 
ery. 


Slock. 


Supplies. 


—$500 and more 


$46,582 
25,933 
16,883 
19,753 
20,435 
27,986 
30, 158 
35,082 
32,658 
46, 573 
55,625 


89.7 
89.2 
88.5 
89.6 
86.7 
86.8 
86.6 
89.8 
88.2 
83.7 
85.1 


1.2 
1.1 
1.2 
1.4 
1.7 
2.0 
1.3 
1.2 
1.4 
1.0 
1.0 


6.7 
7.4 
7.7 
6.7 
9.1 
8.2 
8.9 
6.9 
8.0 
11.7 
11.0 


2.4 


-$499 to -$20C 

—$199 to $0 


2.3 
2.6 


$1 to $200 


2.3 


$201 to $400 

$401 to $600 


2.5 
3.0 


$601 to $800 


3.2 


$801 to $1,000 


2.1 


$1,001 to $1,500 


2.4 


$1,501 to $2,000 


3.6 


$2,001 and over 


2.9 






Average 


30,439 


87.6 


1.3 


8.4 


2.7 







It will be noted that the men having the lowest incomes have nearly 
as much capital as those having the highest. A large business is neces- 
sary to incur large losses ; similarly, large incomes can not be expected 
from small investments. Small incomes usually attend small busi- 
nesses. Where land values are high, the amount of money invested in 
working ca])ital becomes proportionately small. 

DISTRIBUTION OF THE TENANT'S CAPITAL. 

The tenants in the States reported upon have less than 10 per cent 
as much capital as the owners. This is .shown in Table XIV. 

Table XH'. — Arcnif/c distrihiition of the tenant's capital on 2.'il farms in 
Indiana, Illinois, and loica. 



Dislrilmtioii of capital. 



Indiana. 



Iowa. 



General 
average. 



Average total 

Average invested in live stock per cent 

Average invested in macliinery do. . 

Average invested in grain and feed do.. 

Average in cash do. . 



$1,644 

62.0 
14.5 
15. 1 
8.4 



$2, 740 

63.8 
13.9 
14.3 

8.0 



$2,459 



$2,281 



66.2 
13.7 
14.1 
6.0 



64.0 
14.0 
14.5 
7.5 



Two- thirds of the investment of the tenants is in live stock, a 
large part of which is work horses. In a region where the system of 
rental is for the landlord to furnish half of the working capital the 
amount needed by the tenant is less. Few landlords furnish any of 
the working capital on the farms studied in this survey, 

RELATION OF THE TENANT'S CAPITAL TO HIS INCOME. 

A farm owner having a large investment, nearly 90 per cent of 
which is in real estate, can let it lie idle or nearly so for the entire 
year. It is partly due tO this indifference on the part of some 
farmers that all men with large capital fail to show good returns. 



FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 



21 



These men being- free of debt are content to make only a moderate 
living, even though their farms under ordinary management would 
return double the income they now produce. 

The situation of a farm tenant is entirely different. He has his 
capital in live stock, work horses, and machinery. Thase are an 
expense to him unless used. They are the means whereby he can 
utilize capital in the form of land. Generally, unless a tenant has 
use for his teams and machinery he will dispose of them, as there is 
always a market for such equipment. The tenant has a small capital, 
and 5 per cent interest on it is not sufficient to give him a living; 
hence he must receive wages for labor. The farm owner with large 
capital may receive no labor income and only 2 per cent on his 
investment, yet have a comfortable living. 

In Table XV the farms are divided according to the amount of the 
tenant's capital, to show its relation to his labor income. 

Table XV. — Relation of tlic tenant's: capital to liis income on 247 farms in 
Indiana, lllinoi.s, and Iowa. 





Number 
of farms. 


Tenant's average. 


Tenant's capital. 


Number 
of farms. 


Tenant's average. 


Tenant's capital. 


Capital. 


Labor 
income. 


Capital. 


Labor 
income. 


$500 and less 

$501 to $1,000 

8i,(X)l to $1,500 

$1,501 to $2,000 


5 
21 

44 
48 


$324 

799 

1,271 

1,758 


$328 
338 
502 
655 


$2,001 to $3,000 

$3,001 to $4,000 

$4,001 to $6,000 

$6,001 and over 


66 
41 
14 


$2,439 
3,415 

4,808 
8,657 


$915 
1,095 
1,796 
2,879 



RELATION OF BOTH THE TENANT'S AND LANDLORD'S CAPITAL TO THEIR INCOME. 

Table XVI gives the relation of tenant's and landlord's cajjital to 
the incomes they receive for the regions surveyed in each of the three 
States. 

Table XVI. — Relation of the tenant's and the landlord's capital to the income 
received on 2'i~ farms in Indiana. lUinois, and Iowa. 

Operated by Tenants in Indlana (83 Farms). 



Tenant's capital. 



$500 and less 

$501 to $1,000 

$1,001 to$I,500 

$1 ,501 to $2,000 

$2,noi to $3,000 

$3,001 to $4,000 

$4,001 to $6,000 

Total or average for Indiana 



Number 
of farms, 



Tenant's 
average 
capital. 



$324 
750 
1,263 
1,726 
2,381 
3, 324 
4,770 



1,758 



Tenant's 

labor 
income. 



$328 

312 

506 

765 

1,051 

1,217 

2,322 



too 



Landlord's 
average 
capital. 



$9, 492 
9,940 
12, 829 
17, 679 
22, 130 
34,904 
54,088 



18,425 



Landlord's 
income on 
investment. 



Per cent. 
4.0 
2.9 
3.1 
3.0 
3.6 
4.0 
4.4 



3.5 



22 



BULLETIN 41, U. S. DEPARTMENT OF AGEICULTURE. 



Table XVI. — Relation of the tenant's and tJie UunUorcrs capital, etc. — Continued. 
Operated by Tenants in Illinois (71 Farms). 



Tenant's capital. 



$501 to $1,000... 
$1,001 to $1 ,.500.. 
$1,.50I to $2,000.. 
$2,001 to $3,000. 
.$.3,001 to $4,000.. 
$4,001 to .$6,000.. 
$6,001 and over. 



Total or average for Illinois. 



Number 
of farms. 



Tenant's 
average 
capital. 



$871 
1,262 
1,733 
2,482 
3,493 
4,828 
9,011 



2,867 



Tenant's 

labor 
income. 



$429 
614 
709 
1,054 
1,085 
1,732 
4,117 



1,139 



Landlord's 
average 
capital. 



$10,031 
23,737 
29, 703 
36, 948 
42,898 
50,950 
70, 750 



36, 479 



Landlord's 

income on 

investment. 



Per cent. 
2.7 
3.5 
4.1 
4.05 
3.3 
3.6 
3.1 



3.6 



Operated by Tenants in Iowa (93 Farms). 



$501 to $1,000... 
$1,001 to $1,500.. 
$1,501 to $2,000.. 
$2,001 to $3,000.. 
$3,001 to $4,000.. 
$4,001 to $6,000.. 
$6,001 and over. 



Total or average for Iowa. 



$776 
1,288 
1,816 
2, 455 
3,428 
4,825 
8, 303 



2,667 



$272 
387 
490 
639 
983 
1,334 
1,641 



ne 



$8, 568 
13,808 
16,971 
19, 374 
25, 027 
31,490 
50,412 



20, 728 



3.2 
3.0 
2.8 
3.0 
3.2 
3.2 
4.7 



Almost without exception the tenant's income is in direct ])ropor- 
tion to the sum he has invested (fig. 4). This is a very encouraging 
fact in that it shows that a tenant is able to acquire sufficient capital 
to become an owner. Many farmers begin as hired men. After a 
few years they save enough money or acquire credit so that they 
can rent a farm. This gives them a start, even though it may be a 
small place at the outset. By renting, the income is increased over 
the amount that could be earned as a hired man, and in a few years 
the tenant is able to establish sufficient credit or save enough to enable 
him to rent a larger place. 

ONE REASON WHY TENANTS CHANGE FARMS. 

Men wdio start in as tenants usually have very little capital and 
are limited in the size of the farm business they can select. After 
a few years of work they have enough teams and equipment to rent 
a larger farm, which will pay them increased returns for their j^ear's 
labor. The changing of tenants from one farm to another is thus 
frequently a transitory step by J^oung men seeking to become farm 
owners. If these same men were compelled to start on a small place 
and stay there for a long period of years they could never hope to 
eventualh' become owners, but by selecting farms which will use 
their entire working capital to its maximum they are able to advance 
rapidly. The income that a tenant receives with a capital of $4,000 
to $6,000 is decidedly greater than that w^hich he would have if he 
purcha.sed a farm with that amount. No farm owner with less than a 
$20,000 investment received a labor income of over $2,000, while 1 ten- 
ant out of every 22 received this income wnth less than $6,000 capital. 



FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 



23 



Of course, in order to make a substantial income, the tenant must 
have the use of a large amount of capital, which is furnished b.y the 
landlord. The system of renting as practiced in the corn belt to- 
day is particularly well suited to the tenant's advancement. Not 
only is he free to* move from a small to a larger farm as soon as he 
acquires sufficient working capital, but the returns that he receives 
from his investment are exceedingly large. Tenants as a rule avoid 
small farms. They are not large enough to pay the interest on the 
capital and leave anything for labor. The amount of capital that 
a tenant needs to operate a certain-sized farm depends quite largely 
on the type of farming that he wishes to follow and also on the 
system of rental. 

$3,000 



1,500 

















^^ 


-^ 












^ 


^ 


x^ 












/ 


y 














y 


/ 














^ 














/ 



















Fk;. 4. 



O $lfiOO 2,000 3,000 4.000 S,OO0 6,000 7.000 8.000 

CAPITAL 

-Chart showing the ivlation of the tenant's labor income to the capital he has 



invested. 



In the case of live-stock farmers, some landlords furnish half of 
the live stock. Few, if any, furnish any of the work stock or equip- 
ment. 

In the case of a cash rental the tenant has to furnish everything, 
and if he wishes to follow the live-stuck type of farming he needs 
to have a good-sized investment on the large farms. 

The system of farming practiced in the corn belt is one which 
enables a tenant to work a large area of land with small capital. 
The machinery that is used is simple and inexpensive. The work 
horses are, perhaps, the largest investment. 

RELATION OF THE SIZE OF THE LANDLORD'S INVESTMENT TO HIS INCOME. 

The size of the landlord's investment apparently makes little dif- 
ference in the percentage of income, as shown in the preceding tables. 



24 



BULLETIN 41, U. S, DEPARTMENT OF AGRICULTURE. 



It is highly important that the tenant have sufficient working capital, 
which necessitates a medium-sized farm to permit him to use it effi- 
ciently. The tenant, no matter what area of farm he. is operating, 
must first pay rent, even though he has nothing left for his labor. 
The only disadvantage the landlord has in owning a small farm is 
that there may be difficulty in renting it. 

RELATION OF THE SIZE OF THE FARM TO THE PROFITS. 

According to the last census the farms in the North Central States 
are growing fewer in number and larger in area. The use of im- 
proved machinery and the expansive type of farming followed have 
been important factors in rendering the small farm a less efficient unit. 

The term " small farm " as used throughout this bulletin is under- 
stood to be synonymous with small busincvss. Under an intensive 
system of agriculture a very large business may be conducted on a 
small area, but in the corn belt, especially in the district covered by 
this survey, none but an expansive type of farming is found. 

A very good indication of the relative returns that can be expected 
from 40-acre, 80-acre. and 160-acre farms is given in Table XVII. 

Table XVII. — Coiiipari.son of labor incoincs on .'lO-dcrc. ,SO-(icrc, <inil IdO-dcre 
farms in Indiana, ininoi.'<. ami loira. 



Item. 


Operated by owners 
(71 farms). 


Operated by tenants 
(66 farms). 


40-acre 
farms. 


80-acre 
farms. 


160-acre 
farms. 


4'>acre 
farms. 


SO-ac-e 160-acre 
farms. farms. 




20 



S70 


26 

1 

$266 


25 

5 

$364 


1 



$264 


28 



$440 


37 


Number of farms witn incomes of $1,000 or 


13 




$904 







Of all the farms operated ,by owners there were 20 of just 40 
acres in area, the average labor income of which was $70. None made 
a labor income of $1,000. There were 26 men on 80-acre farms and 
only one of them made a labor income of $1,000. Of the 25 men on 
IGO-acre farms one in five made $1,000 or more. 

Only one tenant rented a 40-acre farm, and he had less than $300 
for his year's living. jSIost tenants know better than to rent such a 
small farm, fully realizing the improbability of a good income. The 
average income of the 37 tenants on 160-acre farms was $904. More 
than one in every three made a labor income of $1,000. If the man 
on the 40-acre farm in Illinois or in any of the North Central States 
expects to have as good a living as his neighbor on 160 acres he must 
produce four times as much per acre with no increase in expenses. 

In Table XVIII the farms are arranged according to their size 
to show the relation existing between the area of the farm and the 
income received. 



PARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 



25 



Table XVIII.- 



-Rclation of the size of farm to the income on, 27,'J faiiiis opcnitcd 
hy oicners in Indiana, Illinois, and Iowa. 





Farms. 


Distril)iition per 


acre. 


Money 
available 


Area. 


Number. 


Average 
size (acres). 


Receipts. 


Expenses. 


Interest. 


for farm- 
er's living 
if free of 
debt. 


40 acres and less 


32 
51 
4S 

'14 
31 
36 
19 
12 


37.4 
72.9 
106.9 
149. 4 
179.1 
239.8 
321.8 
623.8 


.?18. 10 
17.09 
16.22 
15.62 
18.04 
18.12 
13.89 
16.19 


$6; 98 

5.46 

6.88 
5.80 
7.12 
6.70 
5.07 
6.28 


$9.03 
8.45 
8.22 
8.30 
8.58 
8.42 
8.32 
7.90 


8416 


4 1 to 80 acres 


848 


81 to 120 acres 


998 


121 to 160 acres 


1,467 


161 to 200 acres 

201 to 280 acres 

281 to 400 acres 

401 to 1,250 acres 


1,956 
2,738 
2,838 
6,182 




273 


178.3 


17.25 


6.38 


8.58 


1,938 







The receipts per acre are practically the same on the small and 
large farms. The expenses are also the same. If greater intensity 
were practiced on the small areas, larger receipts to the acre would 
be the result. 

If the farmer is free of debt he has available for his living the 
amount shown in the right-hand column of Table XVIII. This 
amount represents the combined income from ca])ital and labor. 

The results of the 1910 census shoAV that nearly one-half of the 
farm owners in the counties from which the survey records were 
taken have mortgages on their farms. The amount of 'the mortgage 
is aj)proxiinately one-fourth of the total farm investment. It is not 
hard to understand why the small farmer is less efficient. Just as 
long as he continues to grow such crops as corn, oats, wheat, and hay 
his income will be meager. The only possible remedy is more land. 
He may either rent or buy, according to his available funds. 

On the other hand, if the man on the small place should change 
his type of farming so that he could grow crops returning a high 
income per acre, he would then have possibilities of a much greater 
income. A farm is a place to work, and unless it is so organized to 
permit the full use of labor small wages must result. 

There are a few highly specialized farms which return a high 
rate of income per hour of labor. However, these farms are not 
found where corn and oats are the leading crops. The introduction 
of good live stock in a measure helps toward utilizing more labor, 
but even this step will seldom suffice to give the small farmer an 
income comparable with that of the man on 160 acres or more. 
Thus, the decrease in the number of farms in the North Central 
States is no cause for alarm. It is rather a sign that land is being 
utilized more efficiently and that the same products are being pro- 
duced at less cost. 



26 



BULLETIN 41, U. S. DEPARTMENT OF AGEICULTUEE. 



RELATION OF THE SIZE OF THE FARM TO THE EFFICIENCY OF 

OPERATION. 

The size of a farm is the controlling factor in the efficient use 
of farm labor and machinery. The old hand-labor methods prac- 
ticed by our forefathers, which are still common in Europe, were 
suited to a small area. Under those conditions a man needed only 
as much land as he could properly cultivate alone. A family was 
able to raise only a small amount above that needed for their own 
living. If these methods still prevailed in this country, the present 
number of farmers would be entirely inadequate to support our urban 
population. 

The adoption of modern machinery has enormously increased the 
efficiency of the farm worker. Fewer men are now needed in the 
farming districts, and those not needed are able to devote themselves 
to useful work in the cities and towns. As a result of this condition 
more of the benefits of civilization are available to the farmer. 
Although the farmers are fewer in number, the production per man 
is increasing. 

If hand labor could compete Avith machine work, farm wages w^ould 
be much les.s and the product per man proportionately smaller. Our 
agricultural civilization would then gravitate toward the peasant 
conditions existing in some parts of Europe, where the agriculture 
is develo])ed on the basis of the maximum product per acre of land 
instead of the maximum product per man. 

RELATION OF THE SIZE OF THE FARM TO THE USE OF MAN LABOR. ^ 

In Table XIX the farms are classified according to their total 
area. The cost of labor includes all paid labor, board of workmen, 
family labor, and the estimated value of the operator's labor. The 
value of the family, or unpaid, labor is explained on page 9. The 
tenants estimated their work as Avorth $307. and the oAvners estimated 
theirs at $363, or an average of $305 for all the farmers. 

The term " crop area," as used in the folloAving tables, includes all 
tillable area except permanent pasture. 

Table XIX. — Relation of the size of the farm to the cost of man labor per acre 
on 700 fantiK in Indiana, Illinois, and Iowa. 



Area. 


Num- 
ber of 
farms. 


Total labor (includ- 
ing estimate of 
farmer's own la- 
bor). 


Area. 


Num- 
ber of 
farms. 


Total labor ( includ- 
ing estimate of 
farmer's own la- 
bor). 




Per till- 
able acre. 


Per crop 
acre. 


Per till- 
able acre. 


Per crop 
acre. 


40 acres and less 

41 to 80 acres 

81 to 120 acres 

121 to 160 acres 

161 to 200 acres 

201 to 240 acres 

241 to 280 acres 

281 to 320 acres 


45 
114 
120 
130 
93 
75 
35 
37 


$8.18 
6.54 
4.98 
4.37 
4.21 
4.20 
3.94 
3.41 


SIO. 08 
7.28 
5.57 
4.89 
4.74 
4.69 
4.40 
3.98 


321 to 400 acres 

401 to 560 acres 

561 to 720 acres 

721 to 1,250 acres 

Total or average. . 


30 
12 
5 

4 

700 


$3. 36 
3.12 
3.80 
3.50 


$3.88 
3.88 
4.41 
5.29 


3.74 


4.63 



PARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 



27 



On farms of 40 acres and less the cost of labor is over $10 per crop 
acre. On all farms above 120 acres the cost is less than $6 per crop 
acre. This increased efficiency of man labor on the larger farms 
constitutes an important factor in the cost of crop production. 

RELATION OF THE SIZE OF THE FARM TO THE EFFICIENCY OF WORK HORSES. 

With the iDrevailinii- type of agriculture as found in the corn belt, 
both man and horse need more land to work. Farms with less than 
100 acres in crops are not utilizing horse labor nearly as efficiently 
as the larger places. On farms of 40 acres one horse works less than 
10 crop acres, while on farms of 240 acres or more one horse works 
two and one-half times as much land. One of the difficulties with 
a farm of less than 40 acres in the corn belt is that it requires the 
same number of horses for certain farm operations as the larger 
place. The area in crops is so limited that only a small part of the 
available horse labor can be utilized. 

The labor demand of such crops as corn and oats is not evenly dis- 
tributed through the growing season ; hence, horses remain idle for 
a large part of the time. If men on the small farms were following 
a ditferent type of agriculture, it Avould be possible to utilize tlie 
horses more efficiently by growing crops which recjuire a large amount 
of horse labor per acre. By means of diversification of crops so as 
to better distribute their labor these men may succeed in competing 
with those on the large places. 

The relation of the size of the farm to the number of crop acres on 
which a horse can be utilized is shown in Table XX. 

Table XX. — Relation of flic .size of the fan)i to tlie iiuiither of croi) (teres on 
irJiicli (I lior.se emi he Kfilized on 700 farms in Indiana. Jllinoix. and Irnca. 







Farms. 






Area. 


Number. 


Average 
size (acres). 


Average 
crop area 
(acres). 


Average 

number of 

work 

horses. 


Crop area 

per horse 

(acres). 




45 
114 
120 
130 
93 
75 
35 
37 
30 
12 
5 
4 


36.6 
71.4 
107.2 
149.3 
183.6 
227.4 
262.5 
305.6 
364.1 
474.8 
652.6 
991.2 


26.4 
56.7 
86.0 
122.4 
143.4 
184.9 
211.2 
233.8 
298.0 
368.6 
555.4 
612.0 


2.8 
3.6 
4.5 
5.8 
6.6 
7.8 
8.4 
9.5 
10.8 
13.1 
19.4 
19.0 


9.4 




15.7 




19.1 


121 to 160 acres 


21.1 


Ibl to ''00 acres 


21.7 


''01 1 240 acres 


23.7 


241 to 280 acres 


25.1 


281 to 3''0 acres 


24.6 


S"?! to 400 acres.- . 


27.6 


401 to 560 acres 


28.1 


561 to 720 acres 


28.6 


721 to 1 250 acres 


32.2 







To judge from the data given in Table XX. there is no marked in- 
crease in the efficiency of horse labor on the very large farms over 
the medium-sized ones. 



28 



BULLETIN 41, tJ. S. DEPAETMENT OF AGRICULTURE. 



RELATION OF THE SIZE OF THE FARM TO THE EFFICIENCY OF MACHINERY. 

In the regions studied, small farms do not permit as efficient use of 
machinery as those of medium size. The same laws which govern 
the use of farm labor apply to machinery. Land enough to allow the 
maximum use of machiner}^ is the keynote to the whole situation. 
A certain equipment is needed and this is much the same on a GO- 
acre as on a 160-acre farm. A farm may be of such size as to re- 
quire two sets of certain implements, yet not large enough to permit 
the maximum use of each. 

Figure 5 illustrates the use of modern machinery and large teams 
for farm work. These are typical of the expansive type of farming- 
found on the broad, level areas in the North Central States. 




Fig. 5. — A sulky sranff plow drawn by four horses. Modern machines with large teams, 
such as this, are used throughout these re.!?ions and utilize labor eflBciently. 

In Table XXI is given the machinery investment per crop acre on 
the different-sized farms. 

Table XXI. — Relation of the nize of the farm to the efflcieneii of in a eh in cry on 
700 farms in Indiana, Illinois, and loira. 





Farms. 


Value of machinery. 


Size of farm. 


Number. 


-\verage 
size (acres). 


Average 
crop area 
(acres). 


Total per 
farm. 


Per crop 
acre. 


1 to 40 acres 


45 
114 
120 
130 
93 
75 
35 
37 
30 
12 
5 
4 


36.6 
71.4 
107.2 
149.3 
183.6 
227.4 
262.6 
305.6 
364.1 
474.8 
652.6 
991.25 


26.4 
56.7 
86.0 
122.4 
143. 4 
184.9 
211.2 
233. 8 
298.0 
368. 6 
555. 4 
612. 


$133 

241 
279 
345 
413 
452 
718 
561 
747 
690 
790 
1,313 


So 04 


41 to 80 acres 


4 25 


81 to 120 acres 


3 24 


121 to 160 acres 


2 82 


161 to 200 acres 


2 88 


201 to 240 acres... 


2 44 


241 to 280 acres 


3 40 


281 to 320 acres 


■5 40 


321 to 400 acres 


2 5) 


401 to 560 acres 


1 87 


561 to 720 acres 


1 42 


721 to 1,250 acres 


2. 15 








700 


179.6 


142 8 -^s-* 


"> 69 











FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 



29 



The results are the same for eacli district studied. The machinery 
cost on the small farm of 40 acres or less is double that on those 
over 200. As the area increase's up to 100 acres there is a marked 
decrease in the machinery cost, but above this area the o-ain in effi- 
ciencv is small or entirelv lackino-. 



RELATION OF THE SIZE OF THE FARM TO THE CROP YIELDS. 

Climatic conditions have ^uch marked influence on crop yields that 
records for one year are of little value as a measure of the yields 
in a given region. However, such records do permit a comparison 
of yields on farms of different sizes when conducted under the same 
system of management. 

It is generally believed that the small farm is more efficient owing 
to better crops. This apjiears to be a mistaken theory. The figures 
given in Table XXIT show the average yields of corn, oats, and 
wdieat on the large and small farms. 

Tablk XXII. — Relation of the size of the furm to the i/iclil of rarroiis crops. 





Indiana. Illinois. 


Iowa. I 


Size of farms. 


1 

3 


Yield per acre 
(bushels). 


o 

s 
1 


Yield per acre 
(bushels). 


e 
a 

o 

1 
"A 


Yield per acre 
(bushels). 




d 
o 


03 
O 


'S 
^ 
^ 


c 
o 


C3 

O 




o 

o 


1 


"5 


80 acres and les^.. 

SI to 160 acres- 

161 to 320 acres - 


92 

75 
39 


50. 2 
52.9 

52.8 


41. -1 
47.5 
47.0 


19.0 
19. 2 
19.1 


12 
42 
70 
20 


60.4 
52.3 
52.4 
55.6 


43.0 
37. 5 
39.7 
40.5 


16.0 
15. 2 
15.8 
17.8 


2Ci 
73 
71 


33.2 
36.3 
37.9 


32.0 
33.0 
33.9 
















1 




Total or average 


206 


52.1 


46.6 


19.3 


144 


53.3 


39. 3 16. 5 


170 


37. 33. 5 





1 The yield of com in Iowa in 1910 was much below normal, owini,' to droujiht in early summer. 

In Indiana higher yields of both corn and oats were obtained on 
the larger farms. The difference is slight, yet 2.G bushels of corn 
is w^orth considering. 

In Illinois the highest yields of corn were secured on the smaller 
farms. On the other hand, the yields on larger farms, those ex- 
ceeding 320 acres in size, excelled both groups, ranging in size from 
81 to 320 acres. There were only 12 farms under 80 acres, too few 
from which to draw definite conclusions. 

In Iowa the larger farms consistently had the better yields. 

RELATION OF THE TYPE OF FARMING TO THE INCOME. 

All the farmers in the regions studied are following the same gen- 
eral expansive system of agriculture, developed on the basis of 
maximum product per man. Within this system two important 



30 



BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE. 



types are found. One is the crop farm, where 50 per cent or over of 
the total fann receipts are derived from the sale of i^rain. The other 
type is the live-stock farm, where the farmer markets his crops 
largely through hogs, horses, and beef cattle (fig. 6). The number 
of men following each type will vary greatly in diflferent years, ac- 
cording to the relative price of cattle and hogs (figs. 7, 8, and 9). 

One year's results are altogether too few to form any substantial 
basis of comparison. The data are presented only to shoAV the im- 
portance of the type of farming in relation to income. It is fully 
i-ecognized that further studies in another year under different con- 
ditions might easily show results just the reverse of these in regard 
to the best paying type of farming. 




Pig. 6. — The type of hogs which are au importaut source of income ou Iowa farms. 

Of the 273 farm owners 194 Avere classed as live-stock farmers 
and 79 as crop farmers. The average capital and income of each 
are given in Table XXTTI. 

Table XXIII. — Rchttixm of tin' tiipc of furmhuj to the inco)iic on farms oi)cratcd 
by owners in Indiana. Illi)ioi.-;. and Iowa. 





Live-stock farms. 






Crop 


farms. 






Farms. 


2 

3 






Farms. 


1 










53 


E 


t 






Q. 


• 


State. 




• 




^ 


a 




i 


2 


1^ 


c3 
O 


o 

o 
a 


te 


^ 


a £ 


o 


1 


























■ D 


t 


!n 


> 


03 


a 

3 


03 




> 


c3 




:z; 


< 


Ph 


< 


1-5 


Z 


•< 


Ph 


< 


iJ 


Indiana 


95 
32 


103.2 
284.2 


5.6 
66.3 


$17, 405 
58, 487 


$348 
1.588 


28 
41 


113.0 
229.4 


2.0 
24.4 


$17,981 
45,319 


S182 


Illinois 


-131 


Iowa 


67 


181.2 


40.1 


23, 775 


329 


10 


140. 9 


17.1 


19, 296 


34 


Total or average 


194 


189.5 


37.3 


33,222 


755 


79 


161.1 


14.5 


27,532 


28 



FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 



31 



The live-stock men had a larger area and more capital and were 
receiving a much higher labor income. The average income of the 



H/(SH/*A/o LOW p/?/c£S or c/is/y Oyi^rs. sv/^OA/r^s, ^r r//e cwc/iso AM/?/csr, 

/903 rO/3/2, /^CZ-C/S/i^S . 




/303 1 /sof r 



1 /SCr7 I /308 T 



/305 ' /soe 



SI 70 

\34 



/Y/G»>iAfO LCnV/'/f/CSS O^Cj^S^ CO/PA/, S>^y^OA/7T¥S,^T rjVSCM/C^OO /*5W/?/rZ"7r 
/903 ro /9/2, //^ClC/S/i^£. 




/903 ' /SG'f I /SOS I ' /306 ' /907 ' /90ff ' /309 I /5/<? ' /3// ' /3/2 
Fig. 7. — Chart showing the fluctuation in the prices of oats and corn in the Chicago 
marliet from 1903 to 1912, inclusive. (Data from the Live-Stoeii Daily Drovers' 
Journal.) 

crop farmer Avas $28 per farm, and of the live-stock men $755. This 
wide ditference in favor of the live-stock farmer holds true in each 
of the States. 




1693 1894 1395 1896 1897 1898 1899 J900 1901 1902 1903 i904 1905 1906 1907 1908 1909 1910 1911 1912 



Fig. 8. — Chart showing the fluctuation in the prices of hogs, steers, and sheep in the 
Chicago market from 1S93 to 19] 2, inclusive. (Data from the Live-Stock Daily 
Drovers' .lournal.) 

In the case of the tenant farms, the results of which are given in 
Table XXIV, the conclusions are practically the same. The data 



32 



BULLETIN 41, U, S. DEPARTMENT OF AGRICULTUEE. 



given in this table are for the entire farm, including both landlord 
and tenant. 

Table XXIV. — Relation of the type of farminn to the income on farms operated 
hj/ tenants in Indiana, lUinois, and Iowa. 





Live-stock farms. 


Crop farms. 




Farms. 


t- 






Farms. 














"3 


fl 






3 

ft 




State. 




^ 






I 






£ 


c £ 




R 






c£ 










S 


C =3 


1 


a 


.a 


5 






hi 




S 


t 


d 


fe 


o 


a 


f^ 


a 


P 


,S 










f» 


o3 










<3 




"A 


< 


P4 


■ < 


h.:) 


^ 


<1 


CM 


< 


h:) 




46 
13 

58 


124 
198 
179 


4 
30 
37 


$19, 623 
42, 087 
23,238 


$589 

1,066 

496 


37 
58 
35 


134 
204 
199 


4 
12 
30 


$20,879 
38, 732 
23,654 


$354 




545 




82 








117 


167 


24 


28, 316 


717 


130 


179 


15.3 


27, 755 


327 







On these farms the crop men had a larger area and nearly the 
same capital, yet their income was less than half that of the live-stock 
men. This wide margin of profit in favor "of the live-stock farmer 




Fig. 9.- 



-Beef cattle and hogs in a feed lot, sbowing a method of feeding which utilizes 
labor during the winter montlis. 



is due primarily to two reasons, the most important of which is that 
the crop men sold their corn at about 41 cents per bushel. (See 
Table XXV.) The live-stock farmer fed his corn to hogs, which he 
sold at a price ranging from 1\ to cents a pound. Many men also 
fed cattle, which likewise sold on a high market. 

Table XXV. — Avei'age price (in cents per bushel) received for crops sold on 
owner and tenant farms in Indiana, Illinois, and Iowa, 



» 


State. 


Corn. 


Oats. 


Wheat. 




Owners. 


Tenants. 


Owners. 


Tenants. 


Owners. 


Tenants. 




42.6 
42.9 
39.8 


41.1 
41.7 

38.7 


31.9 
32.3 
28.1 


32.4 
32.2 
28.3 


89.8 
95.6 
88.9 


92.3 


Illinois 


96.1 




88.2 







PARM-MANAGEMENT SURVEY OP REPRESENTATIVE AREAS. 33 



It is generally figured that a bushel of corn will produce 10 pounds 
of pork. If this is true, the crop farmer received only about half as 
much for corn as did the live-stock men. On the other hand, the 
stock farmer had losses due to disease, more expense, more labor, and 
a larger investment, but the difference in the relative prices of hogs 
and corn more than offset these factors. 

Another reason the live-stock man did much better was because he 
utilized his labor. The crops grown in those regions do not fully 
utilize the farm labor throughout the year, but b\' having live stock 
the men had something to do during the winter months and were well 
paid for their work. 

There have been periods in the history of the North Central States 
when the live-stock men received the smaller incomes, and they are 
likely to occur again. This condition will occur when there is a 
large overproduction of hogs and a short corn crop, thereby forcing 
the cash price of corn higher than could be obtained through feeding 
it. Experienced observers of the profitableness of farming in these 
States agree that the man who follows the practice of feeding his 
crops generally wins out in the long run. He will have his off years 
once in a while, but over a long period the chances are largel}^ in 
his favor. 

COMPARISON OF YIELDS OF VARIOUS CROPS. 

It is commonly supposed that the live-stock farmers make greater 
profits, due to much better yields. The yields of corn, oats, and 
wheat on the two types of farms are given in Table XXVI. 

Table XXVI. — Comparison of the crop yields on farms operated bij owners and 
tenants in Indiana, Illinois, and Iowa. 





State. 


Operated by owTiers (273 farms). 




Live-stock farms. 


Crop farms. 




Num- 
ber. 


Yield per acre (bushels). 


Num- 
ber. 


Yield per acre (bushels). 




Com. 


Oats. 


Wheat. 


Corn. 


Oats. 


Wheat. 




95 
32 

67 


52 
60 
37 


47 
43 
35 


20 
17 
20 


28 
41 
10 


51 
51 
42 


49 
36 
35 


IS 




18 












Total 


194 


50 


42 


19 


79 


48 


40 


18 











State. 


Operated by tenants (247 farms). 




Live-stock farms. 


Crop farms. 




Num- 
ber. 


Yield per acre (bushels). 


Num- 
ber. 


Yield per acre (bushels). 




Com. 


Oats. 


Wheat. 


Com. 


Oats. 


Wheat. 




46 
13 

58 


53 
59 
35 


45 
42 
31 


19 
15 
17 


37 
58 
35 


51 
51 
37 


46 
39 
34 


18 


1 Uinois . .* 


15 


Iowa - 






r average 




Total 


117 


49 


39.3 


17 


130 


46 


39.6 


16.5 









34 



BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE. 



There is a slight difference in yield in favor of the live-stock men. 
The results for the one year are only an indication, further studies 
being needed to determine this point. However, the difference in 
crop yields is not as great as many persons suppose. The larger 
profits of the live-stock type of farming are due, primarily, to a bet- 
ter utilization of the farmer's time and to the relative selling price 
of hogs and corn. 

SYSTEMS OF FARM TENURE. 

Two systems of farm rental are found in the districts studied in the 
three States. The most common one is a share basis, whereby the 
owner furnishes the land and one-half the grass seed and pays one- 
half the cost of thrashing and all his taxes and insurance. All grain 
crops are shared equally, the tenant agreeing to deliver the landlord's 
share to the elevator or market. In a few cases, especially in Indiana, 
where the grain is feci instead of sold, the owner furnishes half of 
the productive stock. Where the landlord furnishes no stock and 
sells his half of the grain the tenant may sell or feed his share. All 
hay or roughage is usuall.y fed on the farm. In the grain districts 
very little hay is growni, the farmers using oat straw for feeding tlieir 
horses. 

RELATION OF THE SYSTEM OF RENTAL TO THE TENANT'S INCOME. 

The kind of a lease the tenant secures has a bearing on his income. 
Table XXVII gives the labor incomes of tenants renting under both 
systems. The tenants paying their rent in cash received greater in- 
comes in Indiana and Illinois, but less in Iowa. They have greater 
capital, although they are on smaller farms. 

Table XXVII. — lieJttiion of the i^ystcni of rental to the tenanVs ineome on 2.'/7 
furin.s oiKidted by tenants in Indiana, Illinois, and loiva. 





Cash-rent system. 


Share-rent system. 


state. 


Number 
of farms. 


Tenant's 
capital. 


Labor 
income. 


Number 
of farms. 


Tenant's 
capital. 


Labor 
income. 




14 
17 
27 


$2, 272 
3, US 
2,942 


.«.S()4 

1,440 

689 


69 
ni 
66 


$1,654 
2,788 
2, 5.55 


$733 




1,044 




727 








58 


2,777 


998 


189 


2,332 


835 







With the cash-rent system a tenant needs more capital than on 
the share basis. He has to bear all expenses and furnish nearly 
everything for operating the ]5lace. He takes greater risks and in 
a poor year stands a chance to lose heavily. If he has no surplus 
capital he may have to sacrifice some of his working equipment to pay 
the rent. 



FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 



35 



The year for which the records in Iowa were taken was 20 per cent 
below normal, and this is the main reason the cash-rent tenants made 
less than those on a share basis. In a normal year they wonld 
undoubtedly have made from $800 to $900 in labor income. 

When the landlord rents for cash he assinnes very little responsi- 
bility and has no work to do in looking after the farm. He is there- 
fore entitled to only a fair income on his investment and to no pay 
for general supervision. 

RELATION OF THE SYSTEM OF RENTAL TO THE LANDLORD'S INCOME. 

In Table XXVIII are given the incomes the landlords received 
on the same farms as shown in the ]3recedino- tal)le. 

Table XXVIII. — Relation of tlic si/.^tcm of iriiftil to ttic UiiKUoi-n'fi income on 
2-'il fauns ojienited hij tenants i)i Indiana. Illinois, anil Iowa. 





Cash-rent system. 


Share-rent system. 


State. 


Number 
of farms. 


Land- 
lord's 
capital. 


Returns 
on capital 
invested. 


Number 
of farms. 


Land- 
lord's 
capital. 


Returns 
on capital 
invested. 




14 
17 

27 


$14,968 
28, 771 
19, U4 


Per cent. 
3.42 
2.50 
2.37 


69 
54 
66 


$19, 126 
38,906 
21,388 


Per cent. 
3.56 


IllinoL^ 

Iowa •. 


3.89 
3.49 


Total or averaw 


58 


20,951 


2.70 


189 


20, 473 


3.64 







Those who leased their farms on a cash basis received a much lower 
I'eturn than those on a share basis. This is to be expected, for the 
tenant took the risk and, as in Iowa, did not make as much as if he 
had rented the farm on shares. 

The relative merits of the different systems of renting w411 not be 
discussed here. It is a subject of most vital importance and needs 
careful investigation. The present basis followed in the share system 
of rental has serious defects, which need adjusting for different 
regions according to the crops grown and the type of farming fol- 
lowed. 

COMPARISON OF CROP YIELDS ON FARMS OPERATED BY OWNERS 
WITH THOSE OPERATED BY TENANTS. 

It is the general belief that tenant farms have been robbed of their 
crop-producing power. The records for one year are by no means 
conclusive, yet when taken from adjoining farms in each district 
they are an indication of the results secured under both kinds of 
tenure. 



36 



BULLETIN 41, U. S. DEPARTMENT OF AGRICULTURE. 



In Table XXIX is given the average yield for corn, oats, and 
wheat on the owner and tenant farms in the three States studied. 

TaiIle XXIX. — Comparison of crop yields on otvncr and tenant fai-ins in Indiana, 

Illinois, and loii^a. 





Yield per acre (bushels). 


stale. 


Corn. 


Oats. 


Wheat. 




Owner. Tenant. 

1 


Owner. 


Tenant. 


0\vner. 


Tenant. 




52.5 
54.0 
37.9 


52.2 
52.2 
36.4 


47.8 
38.2 
34.9 


45.5 
39.7 
32.6 


19.5 
17.4 
19.7 


19.0 




15.4 




16.8 








48.3 


46.9 


40.3 


39.3 


18.9 


17.1 







The farms operated by owners averaged about 2 per cent better 
yield than those operated by tenants. The diflference is small, much 
less than many persons imagine. Given equally productive soil, 
the tenant farmer will grow as good crops as the owner. The tenant 
has to work for what he gets, while the owner, often having large 
real estate holdings, does not need to hustle as much, because a return 
of even 2 per cent on his capital is sufficient to give him a good living. 
The tenant farmer is unjustly criticized for conditions over Avhich 
he has no control. He is compelled to agree to terms of lease whereby 
the landlord sells his half of the products regardless of the wishes 
of the tenant. With most of the farms rented on half shares the 
'landlord and not the tenant is largely responsible for the wasteful 
system of farming. 

RELATION OF THE INCOME TO THE AGE OF THE FARMER. 

Under average conditions the farm is no place for the weak or 
for those unable to direct w^ork. The man who intends to spend his 
working life in the country should start early, for success is not 
gained in a moment but by many years of persistent effort. It is 
true that some farmers have made small fortunes in a short time, but 
this is usually through a phenomenal rise in land values. Few men 
have become rich from the real profits of the land. Those who have 
done so usually needed a lifetime in which to work. Through skill 
in management and by hard labor a comfortable living and mod- 
erate profits may be expected. Those persons who are turning to the 
farm with the idea of reaping large incomes are doomed to severe 
disappointment. 

The average age of the farm owners and the number of years they 
have been farming are given in Table XXX. 



FAKM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 



37 



Table XXX. — Relation of the fanner's income to his age and other factors on 
273 farms operated by owners in Indiana, Illinois, and Iowa. 



Income. 



— $1 and more. 

$1 to $400 

$401 to $800..'.. 
$801 to $1,500.. 
$1,501 and over 

Average . 



Age. 



52.7 
49.0 
4S. 8 
47.3 
48.0 



49.8 



Number 
of years 
a tenant. 



.3.0 
2.0 
2. 
4.0 
1.3 



Number 
of years 
an owner. 



21.3 
17.3 
18. 3 
17.0 
20. 



19.2 



Age 

began 

farming. 



28. 4 
29.7 
27.9 
25.1 
26.1 



Age 
became 
owner. 



31.4 
31.7 
30.5 
29.7 
27.4 



29.9 



Those making the poorest incomes were 28 years of age when they 
started farming and Avere past 30 when they became owners. On 
the average the oldest men are making the least profits. 

Many of the farm owners in the North Central States whose records 
are included in this report started in farming as homesteaders, or 
else bought their places when land was cheap as compared to 
present prices. On the average these men rented land for 2^ years 
before becoming owners. This is a much shorter period than is re- 
quired to-day. Land values in these regions are so high that many 
years of work as' a tenant are necessary before sufficient funds can 
be acquired with which to buy a farm. The large amount of capital 
required and the long time necessary in which to earn this may have 
the effect of making more tenant farmers. 

In Table XXXI are given the ages of the tenants and the time they 
began farming for themselves. No data showing how long these 
men worked as hired men before becoming tenants are available. 

Table XXXI. — Relation of the income to the tenant's age and other factors on 
2.'i7 farms operated by tenants in Indiana, Illinois, and Iowa. 



— $1 and more ■. . 

$1 to $200 

$201 to $400 

$401 to $600 

$601 to $800 

$.801 to $1 ,000 

$1,001 to $1,500 

$1,501 to $2,000 

$2,001 and over 

Total or average 



Number 
of farms. 



Age. 



44.7 
42.1 
38.3 
.36.4 
36. 6 
.36.5 
35.1 
3.3.7 
35.3 



.37.0 



Number 
of years 
a tenant. 



9.0 
12.8 
9.2 
8.6 
8.4 
9.0 
8.9 
6.8 
5.3 



Number 

of years 

on this 

farm. 



6.0 
4.4 
.5.4 
4.9 
5.5 
4.9 
4.9 
4.5 



Age 
became 
tenant. 



29. ;; 

29.1 
27. S 
28.2 
27. 5 
26. 2 
20. 9 
.30.0 



28.9 



Results shown in other tables in this bulletin prove conclusively 
that the more capital a tenant has the greater his income; that is, the 
larger business he operates the larger is his pay. It might be 
expected, then, that the oldest tenants would be making the largest 



38 



BULLETIN 41, U, S. DEPARTMENT OF AGRICULTURE. 



incomes. The results as given in Table XXXI show just the reverse; 
the oldest tenants make the lowest incomes. They have the least 
capital and farm the smallest areas. They are men. few in number, 
who are poor and inefficient farmers naturally, and who are not able 
to save enough money to buy a farm. Therefore, landlords with 
good farms will not rent their land to them, and they are compelled 
to take the least desirable farms in the neighborhood. The enter- 
prising young men soon acquire sufficient funds to discontinue renting 
and become farm owners. The tenants of to-day seem to start in 
farming younger than did the owners who began 15 years ago. 

The common saying that the tenant farmer moves from one farm 
to another every year is not supported by the data in Table XXXI. 
Five years is the average period that the tenants had rented the 
farms of which the records were taken. 



RELATION OF THE EDUCATION OF THE FARMER TO HIS INCOME. 

Unquestionably one of the best things for a young man who intends 
to become a farmer is a good high-school education. Many farmers 
with very little schooling succeed, but these same men would do better 
if they had had the opportunity of further training. No one ever 
hears a farmer regret that he spent a part of his early life in school. 

In Table XXXII the farmers are divided according to the extent 
of their education. 



Table XXXIL- 



-Rcldfion of the oumer's or tenanVs education to his income on 
farms in Indiana, Illinois, and Iowa. 





Operated by owners (273 farms). 


Operated by tenants (247 farms). 


Education. 


Num- 
ber of 
farms. 


Aver- 
age size 
(acres). 


Aver- 
age cap- 
ital. 


Aver- 
age 
labor 
income. 


Aver- 
age 
age. 


Num- 
ber of 
farms. 


Aver- 
age size 
(acres). 


Aver- 
age cap- 
ital. 


Aver- 
age 
labor 
income. 


Aver- 
age 
age. 


None at setiool 

Common school 


4 

214 

46 

9 


91 
165 
206 
240 


$15,039 
27, 494 
37, 725 
42, 781 


-$586 
301 
651 
796 


55 
51 
46 
53 


4 

186 

51 

6 


118 
167 
190 
294 


$1,6.50 
2,200 
3,203 
3,351 


$680 

742 

1,268 

1,721 


40 
38 
.33 


College, etc 


41 






Total or average. 


273 


178 


30,606 


408 


49.8 


247 


172 


2,431 


870 


37 



There were only eight men, four owners and four tenants, who 
never had a school training. Of the owners and tenants 77 per cent 
attended a common or district school. About 18 per cent attended 
a high school, and one out of every 35 went to college or to some 
institution of similar grade. 

On the whole the tenants had received more education than the 
owners, 23 per cent of them having more than a district-school 
education, while only 20 per cent of the owners had such training. 



FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 



39 



Those men havino- the best training made the largest incomes, 
although they Avere materially helped in doing this by much larger 
farms and greater capital. 

To determine the real influence of education, the tenant farmers 
having the same training were divided according to their capital 
(Table XXXIII). 

Table XXXIII. — Relation of edtication to proflt.s of tviKints ivith equal cuirital. 











Capital and training. 








Units of comparison. 


$1,000 and less. 


$1,001 to $2,000. 


$2,001 to $3,000. 


Over $3,000. 




Common 
school. 


High 
school. 


Common 
school. 


High 
school. 


Common 
school. 


High 
school. 


Common 
school. 


High 
school. 


Number of farms 

Average size. .. acres . . 
Average age of farmer. 


23 
69 
36.4 


3 
109 
29.3 


73 
138 
36.9 


19 
123 
31.1 


54 
184 
39.8 


12 
165 
28.3 


40 
251 
39.5 


23 
266 
36.8 


Average capital 

Average labor income 


$686 
318 


.$730 
259 


.51,517 
561 


$1,549 
659 


$2,427 
864 


$2,513 
866 


$4,023 
1,086 


$5,095 
2,087 



The difference is in favor of the high-school men, especially in the 
group of those having over $3,000 capital. In this case they made 
nearly double the average income. 

Considering that the farm boys of to-day will be the farmers 
of to-morrow, altogether too little attention is given to their train- 
ing. Farming is a business the same as any other industry, and 
until our schools teach some of the fundamental principles governing 
profitable farming the farm boy is likely to seek work elsewhere. 
Many boys leave the farm because they see no future in it. Another 
nnportant reason is the lack of profitable work at home. A moderate- 
sized farm is necessary to give employment to the farmer and his 
sons. The small farm does not provide work; hence, the boys must 
find employment elsewhere. Let them fully understand how farm 
profits and losses are made and there will be an incentive to remain. 
First make our farms profitable, and the question of keeping the boys 
there will solve itself. 

FARMING AS A BUSINESS. 

By studying a sufficient number of farms in a region one may 
learn how the more successful farms differ from the less successful. 
So far, this discussion has dealt only with an analysis of the farm 
business. From this study of profitable and unprofitable farms cer- 
tain important principles governing farm organization are clearly 
brought out. These fundamentals are as follows: (1) Size of busi- 
ness, (2) quality of business, (3) diversity of business, and (4) 
adai^tability of the type of farming. 



40 BULLETIlSr 41, V. S. DEPAKTMENT OF AGRICULTURE. 

Sise of the farm husmess. — Xo one expects a small grocery store 
which has only a few customers a day to be a great financial success. 
The total amount of business is insufficient to earn the operator a 
substantial income. Exactly the same is true with the small farm. 
The volume of business is limited b}^ the area in crops and the 
capital invested. The small farm furnishes a home as well as much 
of the produce consumed by the family. If it were not for these 
factors the men on the small area would hardly be able to live. 

Wages are a reward for labor, and if a farm does not provide 
work the pay must be corresj^ondingly small. The family-size farm, 
which in the corn belt should be above 100 acres, is unquestionably 
a more efficient unit than an area of 40 acres or less. Crops can be 
grown cheaper, labor will be better paid, and the farmer and his 
family will enjoy more of the benefits of modern civilization. 

Quality of the farm, hiisiness. — The farmer may have sufficient area 
and grow the right kind of crops, j^et not be successful, owing to the 
poor qualit}^ of his entire business. Poor crops that do not pay the 
cost of production, and the feeding of these to unproductive live 
stock are common causes of failure. This characteristic of unsuc- 
cessful farming attracts much public attention. Such farms are un- 
profitable largely through ignorance or indifference on the part of the 
operator. Under good management they can generally be made suc- 
cessful. 

Diversity of the farm business. — Improper organization of a large 
farm limits its possibilities, just as area limits the small farm. 
Single crops or single live-stock enterprises seldom utilize farm 
labor to its maximum. By having several crops there is not only 
better distribution of labor, but the chances of total loss from crop 
failures are lessened. Fortunately, corn, oats, and wheat utilize the 
farmer's time pretty thoroughly through the growing season. In 
some parts of this country certain crops that need labor onl}^ a part 
of the year may be so profitable that the farmer can afford to be idle 
the rest of the year. However, these are the exceptions. Most crops 
are not profitable enough to permit any such practice. Idle horses 
and machinery are nearly as expensive as idle men. (See fig. 10.) 
If the working equipment can all be kept busy on paying enterprises, 
success is almost assured. 

Adaptability of the type of farrrbing. — Equally important in the 
selection of enterprises to permit the maximum use of labor is the 
consideration of the profitableness of each. Dairy cows and cash 
crops may utilize all of the farmer's time, but in certain regions, 
possibly, dairy cattle under the best management could hardly be 
made to pay a profit. Markets and other conditions have to be care- 
fully considered in choosing the enterprises which are to constitute 
the main sources of income. Fitting the right crop to the soil and 



FARM-MANAGEMENT SURVEY OF REPRESENTATIVE AREAS. 



41 



selling it to the proper market or feeding it to the right kind of live 
stock are important factors. FolloAving such types of farming as are 
unsuited to the region is often a cause of unprofitable agriculture 
in some of the older settled States. 

The wide fluctuation in prices of certain cro^DS makes it extremely 
difficult for a farmer to choose a definite rotation. One 3^ear they 
will be such as to give handsome profits on certain crops, and the 
next 3^ear they may be insufficient to pay the cost of production. The 
question confronting the average farmer is not so much one of pro- 
duction as it is of marketing. Most farmers are able to grow a suffi- 
cient quantity of crops to give them a very comfortable living if they 
are assured of reasonable prices for their products. However, under 
present conditions the farmer has to take big chances with nearly all 



^ 




• 


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Fig. 10. — Farm work horsos and mules in pasture during the month of August, illustrating 
a practice which is common in many sections. 

of his crops. If he is so unfortunate as to have a combination of 
crops every one of which is low in price in some particular year, 
severe losses will be the result. Potatoes, apples, peaches, onions, and 
cabbage are good illustrations of the crops that fluctuate widely in 
price from year to year. 

The essential characteristics of the more successful farms are a 
sufficient are^a and a proper organization of well-selected farm enter- 
prises to permit the maximum use of men, horses, and machinery. 



SUMMARY. 



The aim of the farm-management survey is to determine the fac- 
tors governing the profitableness of farming as a business. 

The results from the three districts selected in Indiana, Illinois. 
and Iowa indicate what may be expected from the utilization of 



42 BULLETIN 41, U. S, DEPARTMENT OF AGRICULTUEE. 

high-priced hind under an expansive system of agriculture. In Uie 
region studied the owners made good profits. The average hibor in- 
come of the farm owners was $408 and of the tenants $870. In addi- 
tion, the operators had a house to live in and those products which the 
farm furnished toward their living. 

The landlords, on the average, received 3.5 per cent on their in- 
vestments. The size of their investments had no appreciable bearing 
on the rate of income. 

Assuming that the year in >vhich this study was made Avas a nor- 
mal one, a labor income of $870 to the operator, whether owner or 
tenant, and a return of 3.5 ]Der cent on the capital invested may be 
expected. 

The tenant's income is in direct proportion to his capital and the 
size of the farm he operates. Men owning small farms often materi- 
ally increase their incomes by renting additional land. This aifords 
a better utilization of their equipment without much increase in 
capital. 

The tenant's income is in proportion to the risk he assumes. On 
the cash-rent basis his income is greater in a good year and less in a 
poor year than when he rents on the share basis. 

The farmers making the lowest labor incomes are on big farms, 
but fail through inefficient management. Poor crops, low prices for 
products sold, poor stock, failure to work, and unused capital are 
the main causes contributing to their failure. 

Modern machinery, with the use of more horses and fewer men, has 
made the farm of less than 100 acres an inefficient unit. Further re- 
adjustments in area will occur, which will tend to lessen the number 
of persons needed and at the same time increase the net production of 
the farm. 

The system of agriculture found m the corn-growing States is an 
excellent examjDle of the expansive type of farming developed on the 
basis of the farm work horse as the motive power. This system is in 
direct contrast to the intensive type found in some of the countries of 
southern Europe, where the man and not the horse furnishes the 
labor. The American type needs large areas and is based on the 
maximum product per man. The European type requires a small 
area and is based on the maximum product per acre of land. 

In the corn-belt States the family-size farm is the most desirable. 
It provides work for the farmer and his sons and permits the best use 
of men, horses, and machinery. If the small farm has a place it 
must be near a city and should be highly diversified in its organi- 
zation. 



WASHINGTOX : GOVERNMENT PRINTING OFFICE : 19U 



ADDITIONAL COPIES of this publication 
-Tl. may be procured from the Superintend- 
ent OF DocuiiENTS, Government Printing 
Ofl.ce, Washinirton D. C, at 10 cents per copy 




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LIBRARY OF CONGRESS 



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